Stock prices move up and down every minute due to fluctuations in supply and demand.
If more people want to buy a particular stock, its market price will increase.
This relationship between supply and demand is tied into the type of news reports that are issued at any particular moment.
Why do share prices fluctuate?
Stock prices change everyday by market forces. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall. Understanding supply and demand is easy.
Why does the stock market go up and down?
The Basics: Supply and Demand
If there is a greater number of buyers than sellers (more demand), the buyers bid up the prices of the stocks to entice sellers to get rid of them. Conversely, a larger number of sellers bids down the price of stocks hoping to entice buyers to purchase.
Are stock prices affected more by long term or short term performance?
Instead, long-term stock prices are driven by two main factors: Earnings – the company’s ability to earn money drives its long-term success or failure. Growth – investors pay more for companies that grow earnings over time. The higher the growth rate, the more investors will pay.
How are share prices determined?
A company’s share price is determined by its supply and demand in the market – driven in part by both fundamental and technical analysis. A company’s market cap is the value of the firm, calculated by multiplying the current share price by the number of shares outstanding.